Thu 20 Apr 2006
What They Didn’t Teach In High School
Posted by coglethorpe under Net Worth
I wasn’t known as the best student in high school, but I was reasonably aware of what was going on. I learned about everything from valance electrons to integrals to The Great Gatsby. But when it came to money, the one thing I would need to deal with for nearly every day of the rest of my life, the teaching was almost non-existent. I’m not terribly sure why that is, but I have some ideas about what I’d like to have been taught in High School:
- How to budget - In four years of high school, the only teacher who bothered to try and show a class what a budget involved was my 9th grade metal shop teacher. That’s right, it was the guy who poured the molten aluminum who actually spent 20 minutes one day trying to explain to us what a real household budget involved. No one else said a thing about the one thing I need to do every month - budget. I will note that the business courses might have had some training on a business budget. That’s fine, but why not a home budgeting course for everyone?
- Savings - I don’t recall learning a thing about how much to save or why an emergency fund was so important.
- Retirement - I went to high school when Social Security and pensions both seemed like sound retirement plans. Maybe that’s why it was never covered.
- Compound Interest - This was only covered rapidly in math class one day. There was no thought given to the idea of actually putting money away for 25 years or more.
- Stocks/Bonds/Mutual Funds/Money Market accounts - I had no idea what the difference between any investment vehicle was, nor what any of the terms even meant.
- The cost of a loan - How much does a 30 year mortgage cost vs. a 15 year on the same property? How much interest does one pay on a car loan? What about credit cards, how much will the interest on those add up to over time? And how about pawn or payday loans? How much does that interest add up to annually?
- Ponzi schemes - There’s plenty of get-rich-quick schemes out there, some are legal, some aren’t. Ponzi schemes are illegal, yet so many people get caught in them. If we bothered to explain what they are, and why they don’t work to kids, maybe fewer people would end up in trouble with them.
None of those are complicated items, but they are things we face every day as adults. What did your high school teach about money? I’d love to find out if my experience was unusual, or if they really did teach all that and I was just sleeping in class (more likely than you might think). So feel free to comment and let me know what your high school taught and what you would like to see taught.
Unfortunately, I think I’m going to have to do most of the money teaching on my own. I want to teach them how to make smart moves with their money and avoid the money mistakes I’ve made.
4 Responses to “ What They Didn’t Teach In High School ”
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June 17th, 2006 at 7:02 pm[...] I’ve written before about how we (at least in the US) are poorly educated when it comes to personal finance. We lack some very fundamental knowledge when it comes to the day-to-day management of our money. Ideas like budgeting, saving an emergency fund, or even writing a check is rarely taught, from what I’ve seen. So when it comes to investing, why do some people in the finance industry try to talk to us like we have MBAs? [...]
June 6th, 2006 at 12:12 pm
Same here. Nothing from my high school teachers. Money in high school is more of something to be spent, something that is supposed to come in an unlimited supply from parents, something that you should worry later. How many times have you heard from high school kids that they have saved a couple of hundred dollars for their future? Maybe they do save, but they save probably for buying the next greatest X-box console.
July 21st, 2006 at 9:48 am
I have commented so many times to people about how our educational system lacks to teach the fundamentals of how to make it in our society today. We go through twelve years of school with the only lesson taught about finances is how to write a check in about the fifth or sixth grade. There is no follow up on how to balance your checkbook, something that you really need to know. Know wonder we are in such debt today. They teach you how to spend the money but nothing on how to become financially sufficient with the exception of spend more money. I believe that this is not something that has been accidentally overlooked either. I also feel that relationships (how to have), and communication should be taught in school. We are not born with communication skills (when we are born our only communication tool is to cry and scream for what we want and usually those needs are met to shut us up, and if our providers are not mature enough to lead us through that stage some of us stay there. You know what I mean, that person you can hardly tolerate because they are so demanding of you and does not know how to effectivley communicate to you) and if we are not fortunate enough to have had family members that demonstrated a more effective means then we are doomed in that area as well. So much for the quote, “Everyone has an equal chance to make it”. I think there is to much focus on things that have no relevance to our adult independence and success at a time our brains are at the prime opportunity for digesting and understanding the information. Instead we are tested and quizzed on things that have no comparison to what we are trying to achieve today. Please do not misunderstand what I’m trying to say I believe that we need to know our history but I also believe we need to know how to have the opportunity to financially make it as well.
Financial Reflections replies: I’ve had some of the same thoughts myself about our financial education. Take a look at my article What They Didn’t Teach in High School for more.
September 23rd, 2006 at 5:52 pm
The reason is simple. Schools are factories that produce tax payers. By teaching us how to more efficiently trade our time for money with better jobs, we pay more income tax. On the flip side, business owners get a whole bunch of tax benefits from the government, because they create more jobs for more educated tax payers.